Lege's ethics rules raise concerns

Conflict of interest queries can be difficult to avoid.

By Patricia Kilday Hart

Updated 12:55 am, Monday, January 7, 2013

Photo: Jerry Lara, San Antonio Express-News

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With an eye on Texas' future and their own political fortunes, state leaders and legislators are set to begin 140 days of lawmaking. Here are the issues and people to keep an eye on in Texas' 83rd Legislature:

With an eye on Texas' future and their own political fortunes, state leaders and legislators are set to begin 140 days of lawmaking. Here are the issues and people to keep an eye on in Texas' 83rd Legislature:

Photo: Jerry Lara, San Antonio Express-News

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BUDGET: The recovering state economy is expected to pour billions more into state coffers, but much of the money will go to pay a Medicaid IOU and other expenses that were pushed off two years ago when lawmakers faced a multibillion-dollar budget shortfall. Some are pushing to reverse last session’s cuts in education and other areas. State Comptroller Susan Combs will set the parameters for spending when she delivers her revenue estimate Monday.

BUDGET: The recovering state economy is expected to pour billions more into state coffers, but much of the money will go to pay a Medicaid IOU and other expenses that were pushed off two years ago when

PUBLIC EDUCATION: Texas public schools took a beating when state lawmakers cut $5.4 billion from K-12 education two years ago to help deal with a budget shortfall. Lawmakers also have increased academic standards with the new STAAR accountability system. The combination of less funding and higher standards is a key component in an ongoing school funding lawsuit being heard in a state district courtroom about two blocks from the Capitol. A ruling from Judge John Dietz is expected by midway through the legislative session. Lawmakers, however, are not expected to respond until the Texas Supreme Court rules. Legislators are being pressed to restore some of the public school funding cuts, starting with money to pay for enrollment growth.

PUBLIC EDUCATION: Texas public schools took a beating when state lawmakers cut $5.4 billion from K-12 education two years ago to help deal with a budget shortfall. Lawmakers also have increased academic

HIGHER ED: University leaders hope lawmakers replenish some of the almost billion dollars cut last session, while some legislators are searching for more funding efficiency. House Higher Education Committee Chairman Dan Branch, R-Dallas, proposes basing up to a quarter of each school’s state funding on performance, such as graduation rates, rather than strictly enrollment. Gov. Rick Perry has said universities should lock in tuition rates for students’ first four years to give them an incentive to graduate. The state agency overseeing higher education has asked lawmakers to refuel the state’s largest financial aid program, TEXAS Grants, with $100 million and to modify the structure of the program by lowering award totals to reach more students.

HIGHER ED: University leaders hope lawmakers replenish some of the almost billion dollars cut last session, while some legislators are searching for more funding efficiency. House Higher Education Committee

WATER: The ongoing drought has sparked calls to fund the state’s massive water plan following years of inaction by lawmakers. The price tag: $53 billion. In 2011, the House balked at two bills intended to create the first permanent funding source for a new round of reservoirs, pipelines and other projects to avoid grave shortages by 2060. House Speaker Joe Straus said the state’s water supply will be among his priorities. The most likely starting point appears to be taking at least $1 billion out of the state’s Rainy Day Fund to create a water infrastructure bank, an idea touted by Lt. Gov. David Dewhurst.

WATER: The ongoing drought has sparked calls to fund the state’s massive water plan following years of inaction by lawmakers. The price tag: $53 billion. In 2011, the House balked at two bills intended to

CPRIT: Controversy over contracts awarded by the Cancer Prevention and Research Institute of Texas is prompting a closer legislative look at the entity. Dewhurst said a package of legislation will include governance changes and an increase in transparency.

CPRIT: Controversy over contracts awarded by the Cancer Prevention and Research Institute of Texas is prompting a closer legislative look at the entity. Dewhurst said a package of legislation will include

MEDICAID: Perry has said he will stand against Texas expanding Medicaid to include low-income adults who are not covered by the traditional program, as allowed by the federal health care reform law. If states opt in, the federal government will pay for the expansion’s cost for the first three years. Some continue to press for the expansion in Texas, and some say the federal government might be willing to add some flexibility or GOP-supported elements — such as co-pays for newly eligible adults — as an enticement for states’ participation.

MEDICAID: Perry has said he will stand against Texas expanding Medicaid to include low-income adults who are not covered by the traditional program, as allowed by the federal health care reform law. If states

ABORTION: Perry is championing a proposal to ban abortion after 20 weeks, saying that is when the fetus feels pain. Current state law prohibits abortion in the third trimester, defined by a Department of State Health Services rule as a gestational period of not less than 26 weeks. The “fetal pain” idea is the latest move to impose restrictions on abortion, after last session’s passage of a measure to require a woman to have a sonogram first.

ABORTION: Perry is championing a proposal to ban abortion after 20 weeks, saying that is when the fetus feels pain. Current state law prohibits abortion in the third trimester, defined by a Department of State

GUNS: A deadly shooting at a Connecticut elementary school has fueled some proposals to expand gun laws. Current state law allows school districts to authorize teachers to carry weapons on school property. Rep.-elect Jason Villalba, R-Dallas, wants to allow schools to appoint an undercover “school marshal,” requiring additional weapons training and certification. Lawmakers also are expected to again consider requiring state universities to allow people with a concealed handgun license to carry on campus. Most university leaders contend the decision should remain theirs, rather than a statewide policy.

GUNS: A deadly shooting at a Connecticut elementary school has fueled some proposals to expand gun laws. Current state law allows school districts to authorize teachers to carry weapons on school property.

GOV. RICK PERRY: Texas longest-serving governor is not easing up despite last-year’s misstep-plagued presidential campaign. Perry says he will announce after this session if he will run for re-election or even make another race for the White House. In the meantime, he has signaled in no uncertain terms that he plans to be a player by laying out his markers on issues including the budget, abortion, health care, welfare and guns.

GOV. RICK PERRY: Texas longest-serving governor is not easing up despite last-year’s misstep-plagued presidential campaign. Perry says he will announce after this session if he will run for re-election or

LT. GOV. DAVID DEWHURST: The lieutenant governor is back in the saddle as the Texas Senate’s presiding officer after losing a race for U.S. Senate to conservative insurgent Ted Cruz. Dewhurst since has signaled a shift to the right in an already conservative career, naming conservative Sen. Dan Patrick, R-Houston, to head the Senate Education Committee. Dewhurst has embraced issues include school choice and drug testing applicants for unemployment benefits and financial assistance to needy families. He also cites a focus on the drinking water supply, transportation capacity and public education.

LT. GOV. DAVID DEWHURST: The lieutenant governor is back in the saddle as the Texas Senate’s presiding officer after losing a race for U.S. Senate to conservative insurgent Ted Cruz. Dewhurst since has

HOUSE SPEAKER JOE STRAUS: A fiscal conservative whose priority always has been to pass a state budget that meets the state’s basic needs without adding too many frills. The San Antonio Republican faces another challenge from the far right for his leadership spot in the 150-member state House, but it would take an epic upset for Straus to not win a third term as speaker when lawmakers convene Tuesday. Straus wants to focus on improving public education and on funding infrastructure needs, such as water and highways.

HOUSE SPEAKER JOE STRAUS: A fiscal conservative whose priority always has been to pass a state budget that meets the state’s basic needs without adding too many frills. The San Antonio Republican faces

SEN.-ELECT DONNA CAMPBELL: Tea party-backed Dr. Donna Campbell of New Braunfels trounced longtime Sen. Jeff Wentworth of San Antonio in last year’s Republican primary. She said she intends to serve as the “cavalry” for what she hopes will be “the most conservative Texas Senate” ever. Campbell, who never has held public office, has been vocal on anti-abortion legislation — joining Gov. Rick Perry in supporting the so-called “fetal pain bill” — and has said she will apply her experience as an emergency room physician to health-care legislation.

SEN.-ELECT DONNA CAMPBELL: Tea party-backed Dr. Donna Campbell of New Braunfels trounced longtime Sen. Jeff Wentworth of San Antonio in last year’s Republican primary. She said she intends to serve as the

REP. TREY MARTINEZ FISCHER: The San Antonio chairman of the Mexican American Legislative Caucus sometimes is characterized as “the bull in the china shop” for his aggressive approach. He returns about 60 pounds lighter this session but don’t expect any less scrappy response from the Democrats’ most punchy counter-point to GOP leaders. Lawmakers need to focus on education, water, roads and electricity generation affecting all instead of controversial side issues for GOP primary voters, he says.

REP. TREY MARTINEZ FISCHER: The San Antonio chairman of the Mexican American Legislative Caucus sometimes is characterized as “the bull in the china shop” for his aggressive approach. He returns about 60

SEN. DAN PATRICK: The Houston Republican and broadcaster rode an anti-tax wave to office in 2007 and has steadily risen through the Senate ranks. Among the legislation that he says he is most proud to have passed, he cites placing “Under God” in the state pledge, a tax cut for small businesses and the measure requiring a sonogram before an abortion. As the new Senate Education Committee chairman, he's pushing school choice legislation from a powerful position.

SEN. DAN PATRICK: The Houston Republican and broadcaster rode an anti-tax wave to office in 2007 and has steadily risen through the Senate ranks. Among the legislation that he says he is most proud to have

REP. JIM PITTS: Pitts, Appropriations Committee chairman, showed palpable concern last session over the need to carefully craft cuts spurred by a huge budget shortfall. With the economy improving, the Waxahachie Republican this time wants to draft a budget that addresses enrollment growth in public and higher education. Pitts is notable in part for his ability to face tough decisions with a pleasant demeanor. A colleague once was quoted as saying he “can tell you – as he has done me – to go to hell in such a way that you look forward to the trip.”

REP. DAVID SIMPSON: The tea party-backed lawmaker from East Texas is relatively new but confident enough to mount a challenge to House Speaker Joe Straus for leadership of the chamber. Simpson, R-Longview, made a name for himself in his freshman 2011 session with moves including a bill targeting intrusive airport security searches. A businessman and ordained minister,he can be independent in his views, criticizing the way Republicans handled redistricting and taking issue with business incentive funds.

REP. DAVID SIMPSON: The tea party-backed lawmaker from East Texas is relatively new but confident enough to mount a challenge to House Speaker Joe Straus for leadership of the chamber. Simpson, R-Longview, made

SEN. TOMMY WILLIAMS: The new Senate Finance chairman – and former head of the Transportation and Homeland Security Committee – highlights the need to fund water and transportation infrastructure in a growing state. A Democratic colleague described the Republican from The Woodlands as tough but fair, a lawmaker who will listen to the evidence and make a decision based on the fiscal bottom line.

When Texas' 181 legislators convene under the dome of the pink granite Capitol on Tuesday, they come — by design of the state constitution — fresh from jobs in their communities as lawyers, doctors, real estate agents, farmers, business owners, accountants and other professionals.

After all, they are paid only $7,200 a year for their service, though most will receive a handsome retirement, and must earn a living outside government.

Advocates of a part-time legislature say the system keeps lawmakers in touch with their constituents. Lawmakers are expected to serve their communities and to check their personal interests at the Capitol's massive oak doors.

A study of the personal financial statements filed annually with the Texas Ethics Commission shows the professional lives of most lawmakers are deeply intertwined with their government service, or are directly affected by legislation debated each session.

In some cases, a legislator does not escape criticism, even when pledging not to vote on legislation that presents a conflict.

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Case in point: House Speaker Joe Straus, R-San Antonio, acknowledging his family's long investment in horse racing and racetracks, has recused himself from gambling legislation.

Critics have noted that he appointed a longtime ally to lead the committee considering gambling bills.

When asked if Straus takes into consideration potential conflicts when making committee assignments, a spokesman responded: “Speaker Straus expects all members of the Texas House to hold themselves to the highest ethical standards and to work first and foremost for the people they represent.”

Last session saw Rep. Gary Elkins, R-Houston, lead a fight against payday loan controls while candidly acknowledging that the proposed restrictions would hurt the payday loan businesses he owns.

When pressed during debate whether his vocal opposition constituted a conflict of interest, Elkins replied, “On this particular issue, I am probably as knowledgeable as anybody, and I think the body (the House) needs to hear the expertise.”

It's difficult to determine which lawmakers have conflicts of interest, especially consultants and lawyers, because state law does not require them to list their clients.

For instance, Rep. Ruth Jones McClendon, D-San Antonio, lists her occupation as “consultant” but gives no indication of what clients might be providing her income. McClendon did not return calls for comment.

Zaffirini, whose district includes a portion of San Antonio, said her communications coaching and consulting was considered of “a confidential nature” by many of her clients. Disclosing their names would breach that confidentiality, she said.

Gutierrez said he focuses on immigration law and that many of his clients are fighting deportation cases.

“I highly doubt that any of my clients do business with the state of Texas,” he said.

Gutierrez noted that some of his clients already are listed in his disclosure report. In Texas, legal cases can be delayed during legislative sessions if a lawyer in the case is a lawmaker. Such legislative continuances are required to be disclosed, and each client in those cases is identified.

Other clients aren't involved in any legal proceedings but don't want anyone to know they hired an immigration lawyer, Gutierrez said. Requiring him to disclose the names of those clients could violate attorney-client privilege, he said.

Knowledgeable legislators also weighed in last session on reform of the Texas Windstorm Insurance Agency: Rep. Craig Eiland, D-Galveston, a lawyer who handled hundreds of thousands of dollars’ worth of claims against the insurance agency, and then-Rep. Larry Taylor, R-Friendswood, an insurance agent who has sold windstorm policies.

Taylor, recently elected to the Texas Senate, chaired the committee overseeing TWIA; Eiland was vice-chair. Both weathered a storm of criticism for their involvement in legislation with a direct impact on their private livelihoods.

What exactly constitutes conflict of interest for a legislator?

“The laws are too weak to provide any meaningful guidance for legislators and there is no meaningful enforcement,” said Tom “Smitty” Smith, director of the Texas office of Public Citizen.

One solution, Smith said, would be for lawmakers to follow the Texas Local Government Code, which advises local elected officials to abstain from issues affecting businesses in which they have more than a $15,000 investment or receive 10 percent of their income.

“That bright line would be more effective,” he said. Currently, lawmakers do not have to disclose a dollar amount for each source of occupational income.

According to Rep. Charlie Geren, R-Fort Worth, chairman of the House Administration Committee, lawmakers are not considered to have a conflict of interest if they vote on legislation that affects an entire industry and not just their own specific businesses.

“That's the rule of thumb,” he said. While that definition is included in the House's rules, Geren acknowledged, “There are no checks and balances.”

In some cases, a legislator does not escape criticism, even when pledging not to vote on legislation that presents a conflict. Case in point: House Speaker Joe Straus, acknowledging his family’s long investment in horse racing and race tracks, has recused himself from gambling legislation. Critics have noted that he appointed a longtime ally to chair the committee considering gambling bills.

The appearance of conflicts of interest, said University of Texas government professor Jim Henson, “is endemic to the Legislature as unintended consequence of the notion of a citizen-legislator.” Attempts to make lawmakers full-time legislators historically have met with resistance, he noted.

“We don't want more professional politicians. But the truth is, you now have professional politicians and they have to make a living,” he said.

While legislators bemoan the poor pay they receive for their public service, the personal financial disclosures suggest many benefit professionally from a “Representative” or “Senator” title.

Particularly for a growing breed of professionals — consultants — status as a lawmaker provides an essential résumé highlight for the service they say they are selling: an insider's view of how government works.

Rep. Carol Alvarado, D-Houston, earned $24,000 as a consultant for the campaign favoring passage of the Houston Independent School District's $1.9 billion bond proposal last November.

Her personal financial statement also lists income from three large firms that compete fiercely for government contracts on both the state and local level. One, The DRC Group, won a contract to clean Galveston Bay after Hurricane Ike, and also to remove drought-stricken trees from Memorial Park. Another client, Entech, claims HISD, the city of Houston and the Harris County Toll Road Authority as clients.

“I do general consulting. I give them guidance and strategy,” explained Alvarado, who is running in the special election to replace Sen. Mario Gallegos. “I brief them on the bidding processes, the governance structure ... I help them keep a pulse on the Latino community, what issues are important.”

Another lawmaker-consultant, Rep. Garnet Coleman, D-Houston, disclosed receiving at least $25,000 from Community Loans of America Inc., a payday lender.

“I advise them how to maneuver in a world they don’t understand, the world of public policy,” Coleman said. “I do strategy and tactics. I don’t talk to people for them.”

Coleman said he strives to keep his legislative duties and private consulting separate, advising his clients that he will not contact anyone in state government on their behalf. And if his clients are affected by legislation, for instance, in the effort to control payday loans?

“I vote what is in the best interest of my constituents, and that is not always what is best for my clients,” Coleman says. “I voted yes on every bill” last session restricting payday loans, he said.

There were two major pieces of legislation restricting payday lending last session: HB 2592 and HB 2594. According to House records, Coleman supported HB 2592, but voted with Elkins on an amendment to kill HB 2594, and was absent for later votes on the bill.

Many lawmakers, according to the financial statements, are employed by businesses closely related to their public service.

Rep. Allen Fletcher, R-Cypress, disclosed that he receives income from LaSalle Management Co., a private corrections firm that operates several local jails in Texas, including in Jefferson County.

Fletcher, a member of the House Homeland Security Committee, represented the company this year at the Sheriff’s Association of Texas’ 2012 conference. Many of the local officials who attended that convention likely will appear before Fletcher’s committee supporting or opposing legislation.

Fletcher also disclosed that he operates Security on Site, a Tomball private security firm. Last month, he filed HB 75, a proposal to restructure the Texas Private Security Board, which regulates security firms like his.

Rep. Jim Murphy, R-Houston, earns his income as a consultant for special management districts, which are created by the Texas Legislature to promote economic development in distinct neighborhoods. The Legislature prescribes the powers and financing authority of management districts.

Before he was elected to the Legislature, Murphy served as the Westchase District’s general manager. Because of the direct power lawmakers have over special districts, Attorney General Gregg Abbott ruled in 2005 that an employee of a special district may not serve in the Legislature.

Murphy resigned his job, but continued to serve as general manager as an independent contractor through a new firm he created, District Management Services.

“We structured it that way to avoid any problems,” he said in a phone interview. If all House members recused themselves from every bill affecting their livelihood, the “House would lose valuable real-world experience.”

This session, Murphy has filed HB 258 which permits management districts to contract with utility companies to use right of way for recreation purposes, while granting lawsuit immunity to the utilities. Murphy said he filed the bill as a “placeholder” and does not think the final version will have any affect on the Westchase District.

It’s difficult to determine which lawmakers have conflicts of interest, especially consultants and lawyers, because state law does not require them to list their clients.

For instance, Rep. Ruth McClendon, D-San Antonio, lists her occupation as “consultant,” but gives no indication what clients may be providing her income. McClendon did not return calls for comment.

Likewise, Sen. Judith Zaffirini, D-Laredo, works as a “communications consultant,” but does not list her clients. The same is true of the many lawyer-legislators, like Sen. John Whitmire, D-Houston, Sen. Rodney Ellis, D-Houston, Rep. Trey Martinez Fischer, D-San Antonio; or Rep. Roland Gutierrez, D-San Antonio.

Zaffirini said her communications coaching and consulting was considered “a confidential nature” by many of her clients. Disclosing their names would breach that confidentiality, she said.

Some lawmakers, like Sen. Glenn Hegar, R-Katy, do not disclose their spouse's income; the form stipulates that it must be disclosed only if they have substantial control over the money. Thus, Hegar lists his occupation as farming and makes no mention that his wife, Dara, is a lawyer with the Mark Lanier Firm, a prominent Houston plaintiff's law firm.

“The law requires me to disclose whatever I have control over, and that's what I do,” Hegar said. “I think everybody is trying really hard to operate within the framework of the law.”